MIDLAND MICROFIN NCD ISSUE OPENS ON 26.05.14

Published on Friday, May 23, 2014 by Dilip Davda

Midland Microfin, originally engaged in hire purchase field has switched to micro finance business in 2010 and is a NBFC. It is coming out with Rs. 25 crore NCD issue.

This company is coming out with an offer of Secured Redeemable Non-Convertible Bonds having a face value of Rs. 10000 each. Minimum application is to be made for 5 Bonds (i.e. Rs. 50000) and in multiple of 1 Bond thereon, thereafter. Issue opens for subscription on 26.05.14 and will close on or before 23.06.14. This offer carries CARE BBB- rating indicating moderate degree of safety regarding timely servicing of financial obligations and carry moderate credit risk.

Real Growth Securities Pvt Ltd is the sole lead manager for this offer and Skyline Financial Services Pvt Ltd is the registrar. CENT Bank Financial Services Ltd is the Debenture Trustee.

This offer carries coupon rate between 11% to 12% and has tenure ranging from 4 years, 6 years and 3 months, 9 years and 6 months. Put Option is available for the tenures at 2,3 years, 5 years and 7,8 years respectively. It offers 0.25% extra to Ex-Serviceman, Senior Citizens and Women. Post allotment, it will be listed on BSE. The company offers allotment in demat mode only.

Considering group’s low profile, unlisted status of the company and poor rating, it is better to avoid this offer though it offers higher coupon rates to lure investors.

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About Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).

About Dilip Davda

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

Email: dilip_davda@rediffmail.com

2 Comments

2. Ani

| Link|May 27, 2014 3:47:53 PMReply

Rates are excellent....moreover its less than 1% NPA ,Pls throw some light on rating

1. CS Karan Narang

| Link|May 26, 2014 1:30:46 PMReply

The Group is being managed by Professionals and is the first Micofinance Institution of Northern India. As mentioned in the prospectus the group is promoted by promoters having 45 years of experience in the field of finance in northern India. The Promoters have also promoter a local area Bank "Capital Local Area Bank Ltd.'' which is the largest local area bank of the country. The company within a period of 3 years has a good track record of growth and profitability. The company provides a good return of investment unto 12.82% with Put option which is a unique feature in this issue. There is no deduction of rate of interest if the investor exercises put option. special features of additional interest to Women, senior citizens and ex-servicemen is provided. I would advise the Investors to invest in the public issue.

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